The average cost of childcare in the UK has been steadily rising and many families have found themselves having to plan their budget carefully to cover the required fees. According to a report by the Day Nurseries, the average cost of sending a child under two years old to a nursery part-time (25 hours per week) in the UK has increased to £7,212 in 2022, compared to £7,160 in 2021. Based on the recent statistics published by OECD, the UK currently has one of the highest childcare costs in the world, only being slightly lower than Cyprus.
In addition to the high cost of childcare, parents in the UK also have to contend with numerous other expenses, such as food, clothes and nappies. Costs that only seem to be increasing due to the current cost of living crisis.
The high cost of childcare is also having an impact on women’s employment levels. As part of the Centre for Progressive Policy’s Women in the Labour Market programme, their survey found that 46% of mums struggled to find suitable childcare, with 15% having to quit their job and 30% having to reduce the hours that they worked. The survey found that if women had access to adequate childcare services and were able to work the hours they wanted, they would increase their earnings by between £7.6bn and £10.9bn per annum – generating up to £28.2bn in economic output per annum.
Ministers have recently pitched ideas to reduce childcare costs to assist with the rising cost of living but did you know there’s currency a tax-free childcare scheme that many individuals are able to access? This may be the difference between taking on extra employment or reducing your hours of work to help support your family.
Tax-Free Childcare contributes 20% towards your nursery bill, up to a total of £500 every 3 months. This means that for every £8 you pay into the account, the government will pay in £2.
To qualify, you’ll need to be working, earning at least the National Minimum Wage or Living Wage for 16 hours per week on average and earning less than £100,000 per year. If you have a partner, they’ll need to fall into these categories as well. However, this does not mean cumulatively. For example, if both parents earned £60k then given they meet other criteria they are eligible for the scheme. However, if one earned £19k and the second earned £101k, despite the household income being the same in both examples, the second household would not qualify. On top of the above-mentioned requirements, there are additional eligibility criteria based on immigration status, your child’s age, circumstances and current benefits received that you need to consider.
If you have any questions, please feel free to reach out to us and we will assist you best as we can.
Looks like you reached the bottom of the article! Fancy checking out some of our other posts?
.jpg)
Interest rate rises have recently made headlines for all sorts of reasons, sparking discussions about their impact on society and the economy – will higher rates curb inflation? Who stands to gain the most? What will happen to my mortgage? What has gone somewhat unnoticed until recently, however, is the increase in interest income that many will now be getting on their account balances in savings and current accounts, and what it means for your tax liability.
Continue reading
Tax season can be a stressful time for many – if you’re among those who find themselves unable to file on time, know that you are not alone and others have been in the same situation. In this blog post we will discuss your options if you find yourself unable to file on time, the consequences of late-filing, as well as available avenues of appeal against late-filing penalties.
Continue reading
Capital Gains Tax (CGT) is often a misunderstood topic. It is an important tax to be aware of, as it affects both individuals and businesses and some common types of transactions. We’ll delve into the history of CGT in the UK, explain when HMRC collects CGT, and provide an overview of the rules and regulations which govern it. By the end, you’ll have a better understanding of how CGT works and how it affects you.
Continue reading
The self-assessment tax deadline is quickly approaching and you may be wondering if there is any way to reduce the amount of tax you owe to HMRC. Fortunately, there are several allowances and deductions available that you may be eligible to claim. In this blog, we will explore a few examples of these allowances and how they can help you lower your tax bill. Don’t miss out on the opportunity to potentially reduce your tax burden – make sure to check if you’re eligible to claim any of these allowances.
Continue reading
